QE Land – Inter Market Analysis

ONLY CHARTS AND SHORT COMMENTARY TODAY

4 hour

Dollar buyer’s return or this is just a mere short covering process as money rotate out of the euro dollar trade? As mentioned yesterday, the talk of more QE from the ECB should spark buying interest but this morning price action already showing signs of a pullback. This pullback is key as to the development of the next move.

Dollar index is biding its time here as it consolidate after setting up a 5 days rally – cracks are seen as Yen found some strength today while NZD found buyers too. Hint of more QE from ECB will spark buying interest in the dollar index but we will not be surprise to see a counter move – will have eyes on how big this counter move is but we felt it will go nowhere as it line up for FOMC week.”

German Bund

Daily

4 hour

Decision by the ECB of potentially more QE has set off the rally but we are seeing a slight divergence on the 4 hour chart and will wait for a confirmation for a pullback. It remains early days but the pullback will be a rather sizeable one before another run higher. The daily 200 ma will get retested again.

All the sellers disappear as we approach to ECB meeting while the daily 200 ma held like a champ. Bunds could continue to trade within this tight range and the outcome of the meeting could instigate the next directional move.”

Eur/Usd

Daily

4 hour

Support found at the larger rising channel which potentially is a bear flag formation. Can this support hold? Given the clear indication of more QE, the likelihood is we head lower and play out the bear flag. With a dovish ECB, the Euro fell but what happens if the FOMC is also dovish?

Profit taking ahead of the ECB meeting is a wise move and increasingly, ECB members are considering to expand QE programmes due to low inflation numbers. Draghi could project another negative to rather stable outlook on growth but concerns are there for them to do more.”

German Dax

Daily

4 hour

We broke higher as per mentioned, with an inverse head and shoulder formation in play. A pullback to retest the breakout level is the next play here and any dips are buying opportunity for a reconnect to 200 dma which stands at 11075 levels.

With the bears unable to drive prices lower and the dax 10000 psychological level defended, there is only one way which is up. The QE induced trade has also benefit from talk from ECB officials about expanding QE programmes. Despite the late sell off in Chinese equity market, dax has succumbed to more buyers. Pullback could happen but that will need a break below the 4 hour 20 ma and 200 ma

Gold

Daily

4 hour

Either the bulls overstay their welcome or we could get a decent bounce before the end of the week. We seek the latter and will look to build short positions on any spike.

Silver

Daily

4 hour

We bounced off the 4 hour 100 ma and structure is still looking strong for a retest higher. We marked an area of interest where sellers could try to add on short but should this get taken out with no rejection then we could see higher silver. We remain adamant for a deeper pullback.

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